Retailers still flout warranty code

A Marketing Week investigation has revealed that electrical retailers are continuing to ignore their own code on the controversial selling of warranty schemes.

The findings bring the introduction of a statutory pricing code by the Department of Trade & Industry, which has been opposed by retailers, closer.

The self-regulatory code, drawn up 14 months ago by the British Retail Consortium (BRC), was designed to prevent any statutory legislation being recommended by the Office of Fair Trading which launched an investigation into electrical warranty sales in December 1994. The inquiry looked into concerns over the pricing of warranties and a lack of information on the range of policies available.

All the major retailers, including Dixons, Currys and Comet, signed the code. Its clauses include a demand that retailers display the full range of warranties available, including those of manufacturers; refrain from pressure selling; and provide a copy of the BRC code to consumers on demand.

But our survey of six sample stores – all major outlets – suggests that retailers are not meeting even the most basic of obligations.

We visited Dixons, Comet, Currys, Tandy and Powerhouse stores in the London area. None displayed any information about alternative warranties, none could provide a copy of the BRC code and in one case an assistant claimed, falsely, that the manufacturers of brown goods do not offer warranties.

Our findings chime with those of the OFT which investigated the operation of the code earlier this year. It warned that if there was no improvement it would recommend statutory pricing. The result of a second OFT review of the code is expected at the end of the summer.

See Cover Story, page 32